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Blu-ray Scores Major Victory in Format War

by Ian Paul on January, 9 2008 at 08:01AM EST

Sony has dealt a major, and possibly decisive blow to Toshiba in the current HD format wars. On Friday, Warner Brothers announced that it would cease production of the HD-DVD format backed by Toshiba in favor of Sony's Blu-ray. (Source: nytimes.com)

The format war is similar to that of the 1980s when Sony was locked in combat with JVC and others as Beta and VHS home video players battled it out for consumer support. Sony's Beta ultimately lost that battle.

The current war started shaping into a serious conflict in 2006 when both sides released their first home video players. Despite a lot of media attention and hype over the wonders of the new technologies customers played it safe and waited to see who would come out on top. Sony took an early hit when Microsoft decided to exclusively back HD-DVD, which led to both Intel and Hewlett-Packard jumping on the HD-DVD bandwagon. That was followed by LG Electronics straddling the fence by licensing both HD-DVD and Blu-ray after originally agreeing to exclusively back Sony's format. (Source: nytimes.com)

At the time it was deja vu for Sony. The company was having problems getting its highly anticipated Playstation 3 off the ground, and had just signed on Howard Stringer as its new CEO in the hopes of invigorating sagging performance in the broader marketplace.

Now Sony has seemed to do just that; although two months ago Stringer regrettably admitted the format wars were mired in a stalemate, the announcement from Warner Brothers lead the New York Times to declare: "The high-definition DVD war is all but over."

That may be true, but Toshiba is not taking the news well. During the Consumer Electronics Show this weekend in Las Vegas, Akiyo Ozaka, president of Toshiba America defiantly told reporters that HD-DVD was far from out of the game, and "has not lost." (Source: reuters.com)

Despite Toshiba's response after being caught off guard by Warner Brothers, the fact is Blu-ray had some strong showings last year with 60 percent of Warner's new format disc sales in 2007 going to Blu-ray, and sales for Blu-ray set-top boxes also started gaining ground in the last quarter of 2007. Warner joins Blockbuster, Disney, MGM, Sony Pictures, Target, and Twentieth Century Fox as exclusive proponents of Blu-ray. HD-DVD, meanwhile, counts Paramount, Dreamworks and Universal as its major players in the movie business. (Source: forbes.com)

With Warner's announcement, Blu-ray now claims close to 70 percent of the market for home entertainment. "The window of opportunity for high-definition DVD could be missed if format confusion continues to linger," Warner Bros. chairman and Chief Executive Barry Meyer said in a statement released Friday. The window of opportunity is open wide indeed, but only for Blu-ray.